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tv   Nightly Business Report  PBS  July 1, 2015 7:00pm-7:31pm PDT

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. thi nightly business report with tyler mathisen and sue herera. >> back to work. signaling another strong employment rep from the go tomorrow. shifting gears. what the smallest of the big three automakers did that has never been done before. hitting the books. why students taking out loans for the upcoming year just got a bit of good news. just a bit. all that and more tonight on "nightly business report" for july 1st. good evening. auto showroom are packed but greece isn't budging. the lack of progress on that country's debt seems not to faze investors today. instead they focus on better than expect data. a key laebl report showed
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private companies created positions at th fastest clip so far this year. according to the pay roll processor adp, firms added 237,000 jobs in june. more than expected. and that along with strong auto sales gave a lift to share prices. by the close, the industrial average. the nasdaq gained 26 and the s&p added 14. here's more on today's private pay roll report and what it may signal about tomorrow's big report on the labor department. >> ahead of tomorrow's labor departme employmen report a closely watched survey of private sector pay rolls had its biggest gain in six months. >> construction jobs manufactur transportation distributi financ it goes on and on and on. this is housing will be the key to getting back to full employment by this time next year. >> construction spending rebounded in may to its highest level in more than six years. other signs of a strengthening factory
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activity accelera due in part to a big boost in auto sale. tomorrow's consensus forecast call for 233,000 new jobs created month with the unemploy rate dipping back to 5.4% a seven-year low. economists are for an upside surprise. >> we are looking for a solid 250,000 in the month of june and we're looking for this to be the best hiring market for young people since the onset of the crisis. >> many may, employers added 280,000 workers to pay rolls. another strong jobs report will heat up the debate over when the federal reserve will raise key short term interest rates. the recent update could put september in play. >> in the eyes of the fed, the threshol for the september hike is low. they only need to see a little more improvement in the job market and feel confident in their forecas in medium
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term. >> strong job growth along william proving data on consumer spending and housing could be the spark that ignites the entire economy for the second half of the year. for nightly business report. more now on those june auto sale. several of the nation's top automakers reported higher sales as demand for trucks and suvs continues on strengthen. ford and chrysler saw their sales rise while gm saw a drop. more now on the results and the what smallest of the auto makers did for the very first time. >> the american car buyer is not slowing down. in fact the june sales topped 17 million vehicles for the third time in the last four months. the combination of job growth low interest rates and strong consumer more people this is the time to buy a new car or truck. >> right now people feel
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comfortabl they feel like they can buy. when we're in the middle of a recession a even coming out of the recession, there was a lot of concern about job security and th like that. you might put off a purchase. right now we're feeli as to where things are going. >> the big winner in june fee at chrysler. for the first time ever, the smallest of the big three sold more vehicles at dealerships than ford. a big reason why is jeep where sale shot up a whopping 25%. jeep is benefitting fro america's renewed love of suvs which is due in part to gas prices remaining relatively low. it also helps jeep and other automake that they're selling a new wave of small suvs. one reason why many expect strong auto sale to continue for the second half of this year. "nightly bus chicago. >> stewart hoffman joins us to talk about the small auto sale
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numbers and what he expects tomorrow from the business report. almost as always. >> to have you with us. let's talk about jobs. what is the number you all are forecastin for tomorrow? and how is healthy overall do you grade the u.s. labor market today? >> well i'm closer to consensus, 230,000 for total pay roll jobs and a drop in the unemploy rate to 5.4%. hopefully that's not the kiss of death. les also remember what the market will look at if we get any upward revisions to march and april. remember april and may, remember the may number was 280,000. it won't completely surprise me. and the average earnings i think we might see that jump to .4 catching one other signs that wages are accelerating. so i give those job markets right now and the labor market sort of a b or b plus. another thing that the fed and
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janet yellin is how many people will be working part time of i think we'll see most of the jobs crea what about the economy overall? we just heard from phil that auto sale are very strong. but does the strength in the lar market or shall i say, the continuing recovery in the labor market and the strength thought over sales really reflect the underlying strength of the economy? >> i think it does. i must admit, i've been on the hi. like we ha las year a weak first quarter and a strong second quarter, we've seen it in the construction numbers. march, april and may. the auto sale number. auto productio numbers for the summer quarter, just starting now will be strong.
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fall fewer shutdowns in jul there typically are. i think with construction housing which we didn't talk about, some very good numbers on housing sales and of course constructi in today's report and the ism, the manufacturing index doing better. wi auto sale and auto production lifting that, i'm still remaining quite comforta on the high side of the consensus. that makes me think isn't is definitely in play. not only in play. i think especially after we get on july 30th a big day. we'll get gdp revisions for the la couple years and i think the second quarter' estimate will top 3%. if that happens, i think that's paving the runway for what we'll call a lift-off in the fed funds rate of a quarter of a percent in september. it will be a very slow ascent there after. >> stewart hoffman. >> the darrel of justice is
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investigg possibl collusion among airlines. regulators are looking into potential unlawful coordination to potentially limit capacity and keep prices artificially high. sent shares of the major airlines down as much as 3% today. >> well, the justice departm also has filed an anti-trust suit to stop the sale of general elec trick appliance business to electrolux. they said the $3 billion acquisitio would benefit american consumers and such a deal would combine two of the leading manufacturers of ranges, cook tops and ovens sold in the u.s. ge says it will fight the lawsuit. we talked about hougss construc spending rose in may to its highest level in more than six and a half years. according to the commerce department jump in nonresidential projects. a second report showed growth in manufa well. the index of factory activity hit its highest level since january. > still no deal in greece
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after another round of negotiatio failed and for that country's pensioners the situation is getting much worse. they are n facing limits on their mont type end. michelle reports from athens. >> reporteretirees many of them he tolder lyly lined up across greece. ea they were told they could withdraw all of their stipends.w greece is running short of physical cash and this morning they were given only 120 euros, roughly $135. this 88-year-old man told me he is frustrated but what can he do? banks are so close to everyone else including businesses. nellie is a manager for a company that distributes italian coffee. it's from where? . we bring it here in greece and
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we give to all customers. it to cafes throughout athens and even gives customers barista lessons. like all company which rely on imports, it needs a functioning bank so kit pay overseas suppliers. the big problem is we don't have how way we pay in italy because all banks are closed. so they cannot from italy bring here any coffee. >> she's worried the banks will be closed longer than the coffee has coffee. >> there is no sign the bank there's open any time soon. the european central bank is unlikely to deliver any fresh cash to this country until it has assigned a new bailout deal. even though prime mir late last night to the country's creditors sayin he is willing to make big concessions he then went on national television and called them blackmailers and told the greeks to vote no in an upcoming referendum on the very
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bailout agreement. that didn't sit well. >> with that the finance minister made it clear, they've had enough. >> there will no coming talks in coming days. nor betwee the greek authoritie and the institutions on proposals or financial arrangemen we wil simply wait now the outcome of the referendum on sunday. >> they aren't the only ones. so are all of the greek people. for "nightly busine athens. still ahead, students taking out federal loans for the upcoming school year got good
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the s.e.c. is proposing a new rule that could impact what some executives are paid. the agency would require a portion of bonuses awarded to executiv to be recovered or clawed back if a public company restates its financial re prol would apply to all restatemen including those reissued becau of mistakes. some say that measure goes too far and should not be applied to smaller company. >> president oba says the u.s. and cuba struck a deal to open embassies in each other's capitals. it is the next step in the move to reestablish diplomatic and relations between the two countries for the first time in more than half a century. >> the progress that wy is another demonstration that we don't have to be imprisoned by the past. when something isn't working, we can and will change. >> the president went on to say it is time for congress to move forward on cuba and lift the
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embargo. the embassies will open on or after july 20th. from cuba to puerto rico where the island is being co greece because of its own debt crisis. today some positive news. all of the nearly $2 billion in debt today has been paid. but there's still a lot of uncertaiy around what might happen next. kate kelly has more. >> reporte puerto rico made headlines whe the governor said the economy was in a death spiral. e there's disagreement about the rhetoric, when you talk to the locals there's no question about the reality. >> i got lucky. i found a job here. but most of my colleagues had to get out to the united states to find a job. >> reporte was the economy always this bad? or was it better in the past? >> the economics? >> reporte yes. >> it's bad. >> it's been really hard.
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really hard. >> reporte but today there was a little progress. a $645 million payment tied to what is known as general obligati bonds was made as was another tie to the island's electric power utility. in an interview today, the restructurg officer lisa donahue noted much work remains to be done. >> the debt is something from the beginning, it has to be dealt with. it is not sustainable in its current form. we've been making a lot of progress toward trans forming it into a modern utility with an ability to manage itself from a business perspective and in a more flexible manner. >> reporte puerto rico is still saddled with $72 billion in debt with no clear path to paying it down. kate kelly in san juan. now gambling revenue has
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fallen again. it dropped 36% from june from a year earlier. many attribute it to china's crackdown on corruption. >> reporte glamorous hotels spectacu attractions, macao is the las vegas of the east. since the chinese gambling central opened international ininvestig in 2002 they've been on a hot streak generating more revenue than the las vegas strip. no the chips are down due largely to beijing's anti-corru drive. >> these investigations tend to intimida everybody. so it has curtailed all of the upper end spending and business that's are in that area of the economy like better automobiles and clothing and fashion and macao fall in that category. >> reporter: that stops people like lou. once a frequent visitor. an officer for a chinese state
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bank in the nearby city he says he hasn't done anything illegal. bu i think this may last forever. >> even so, the potential of $1.3 billion increasingly wealthy chinese consumers has the casino operators betti big. >>. this can be found all over macao and in 2016 this will be the latest entry. >> the palace will feature a lake an option beyond the casino in line with macau's drive to lure more visitors with attractions similar to las vegas. with policies in beijing unpredicta they wi e a comeback is unclear. >> my attitude at the moment is that china is in a state of change brought by its leadership that determined the change was necessary. to argue with that if you
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pay attention and read why there's change. >> reporte what the long term implicatio of it are very uncertain. >> r for nightly business report. the biggest deal ever in the insurance industry is where we begin tonight's market focus. switzerland based ace limited will buy chubb for $28 billion in cash and stock. that deal comes as they set their faces pricing pressure and diminishin interest come. ace was up a fraction to $102.49. general mills out with mixed results as th cereal maker continues to struggle with changing consumer tastes. the dollar also weighing on the top line. its profit managed to beat estimates. shar rose 2.5% to 57.09. a huge jump in earnings from constelln brands. the alcoholic beverage maker saw profit rise as the mexican beer segment continued to compel
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growth. the ceo sas tt to continue. >> we expect our beer business to grow double digits this year. so first quarter, the growth has been even beyond our own expectatio and at this point we don't foresee that growth rate changing dramatically as we go thh the year. >> however, shares were off attraction. the spice maker's profits fell. the full year outlook but that wasn't enough to satisfy investor shares nearly 2%. they finished at 79.57. coffee cups from j.m. smucker today. its droppin pri for the majority of its coffee productst 6%. those include that folgers and dunkin' donuts. come after the price hike last year because of rallying coffee bean costs. this year the commodity is down in price.
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shar r a fraction. angie's list has made chief operating officer jay mark howell the interim ceo. this follows the resignation of the co-founder. the shares fell nearly 8% to $5.68. investors bought up shares of teledock in its market debut. it facilitates call between doctors and patients. the top go end of the range. it sold momillion. they soared 50% to finish at 28.50. >> students taking out loans will get a little bit of welcome news. as of today, the interest rate on student loans will drop albeit slightly. if the federal reserve gets ready to hike rates possibly sometime this year, will the reprieve be short-lived? sharon has more. >> reporte aaron louise will start his sophomore year this
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fall. he's alrea learned a costly lesson about student loans. >> at the end of my undergradu career i will ha just under $150,000 in debt. >> reporte fortunately in the upcoming school year he and others who take student loans get a break. have th rate will be better. >> as of july 1st, the rate on stafford loans for undergradu will fall to 4.29%. down from 4.66%, the loans issued in the last action dellic year. stafford loans are now 5.84%. down from 6.21%. and parent and graduate plus loans are now 6.84%. down from over 7% last year. many borrowers may not realize how much they're saving. >> i've never done the math. >> reporte rate cuts will have a modest impact saving borrowers
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about $50. about $500 in interest on a 20-year term. but it only applies to new loans taken for the upcoming year. >> i'm happy they're lower but i don't thk they'll stay like this forever. >> reporte in 2013 congress changed the way federal student loan rates are set. facing them on the be rate note every spring. rates can change each year with market fluctuations. once you borrow the money the rate is set for the life of the loan. >> when congress changed that they didn't anticipate they would go down. we think it is short-lived. so as the fed increases interest rates in the market we anticipa that those rates will change for federal student loenls and increase as well. >> starting next year, the federal loan rates are projected to top 5%. and rise above 6% for the 2018 2019 school year. though rates may increase loans
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are what he call a necessary evil. >> i care what they are because i'll have to worry about that later down the road. but i'm going to take them out regardle. >> reporte like millions of students the c of financing a college education won't deter him from getting a degree. for "nightly busine" coming up drying up. how one california gardener stays in business despite the state' here is what to watch tomorrow. we told you earlier, it is jobs day. we'll have the labor department's june employment number which could move the
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markets. al a read on employment with how many americans filed for unemploy benefits. d fiat chrysler will come under scrutiny about its low efforts to recall affected vehicles. that's what to watch tomorrow. as soon as we turn the page on 2015, a number of company are ushering in a new era with changes at e top. starting today, news corp boeing and twitter all have new ceos. despite the notable changes, the overall trend is different. according to the firm ceo turnover was down 13% through may. now to the stock market's level and an improving economy. macy's joins the list of companies serving ties with donald trump. the departmen store will pull his branded merchan stores following the controve comments he made about immigrants during his controvers campaign. nbc and others have already ended their business relation trump. and finally, the very dry
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state of california. while some businesses are suffering from the state's worst drought in recorded history, others are finaling opportunity. jane wells has our story from los angeles. the drought is a very thr he used to do $100,000 a year selling sod. business is down 50%. >> we laid off 30 people last friday. it was a tough day. probably the toughest thing i've ever done. >> reporte instead of planting grass, people are pulling it out to save on water and get rebates. gardeners are benefiting in the short term with the changeover but it's not clear what will happen when there are fewer lawns to mow. >> it is pretty much the same amount of work. just diffe >> r overall plant sale are down 30% stinls governor ordered in water. >> may should have been the best we had in the last ten years. and it wasn't so. >> reporte for all the losers in the drought, there are also winners. technology company are
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discover that water is the new gold mine. >> you've done a good thing in mulching. water smart is a software company which provides to dozens of water agencies letting customers know how much water they use compared to neighbors. >> it is difficult to tell that the water sort of looks milky. this looks clear. >> reporte i was surprised to lear i'm using 50% more water than peers. >> i question the data. >> so we have this a lot. people think i couldn't use this. th could have a leaky toilet they've had for years. >> last year we tripled the business. year before we tripled the business. this year we're on track to triple the business. >> does the guilt trip work? water smart claims the software reduces consumption 5%. mostly in the lawn. but he thinks sod is getting a bad rap. lawns cool the environment and sequester carbon but no one wants to hear it. and he is strike to hang on until the drought is over. >> when all that ends and people
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go back to their preferences, they'll go back to launches. >> that's assuming the drought ends. >> let's home it does and soon. >> it has been a long long time. >> hopefully they'll get some rain. will do it for "nightly " thanks for joining us. >> and i'm tyler mathisen. we
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tonight on "quest" -- mt. umunhum is one of the most majestic peaks in the bay area. but cold war security and toxic contamination put its summit off limits for more than half a century. now, efforts are underway to open it up to the public. and it's a repeated theme in hollywood movies -- a killer
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asteroid zooming toward earth. but that couldn't happen for real, could it? major funding for "quest" is provided by -- the national science foundation and the corporation for public broadcasting.


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